10 min read

How to Pay Independent Contractors in the Middle East and North Africa

Contractor management


Gabriele Culot


March 11, 2024

Last Update

July 03, 2024

Table of Contents

Independent contractor payment options in the MENA region

Understanding Local Currency and Exchange Rate Implications

Compliance with Local Labor Laws and Tax Regulations

Mitigating Risks When Sending International Payments

Building Strong Relationships with Contractors

The importance of an independent contractor agreement

Supercharge your contractor management with Deel

Key takeaways
  1. MENA region businesses have a diverse range of options when it comes to paying their contractors, each with specific features and limitations
  2. Ensuring contractor relations, including payment and classification, are legally compliant is vital to the success of any business
  3. Understanding the regulatory landscape demands staying informed on tax obligations, including self-employment tax and accurate contractor reporting practices

The Middle East and North Africa (MENA) region, encompassing a vast stretch from Morocco to Iran, offers a mosaic of economic environments characterized by varying degrees of development, market openness, and resource abundance. This diversity significantly impacts the dynamics of doing business across the region, including the management of contractor payments.

Countries like the UAE and Saudi Arabia boast high-income economies propelled by oil and gas and burgeoning, diversified sectors like tourism, finance, and technology. Here, digital payment infrastructures are more developed, aligning with the global shift toward fintech solutions and a strong presence of international contractors and digital nomads who favor remote work.

In contrast, nations like Egypt and Jordan present emerging market setups where traditional banking systems play a more significant role but where digital payment adoption is rapidly increasing. Moreover, the presence of war-torn economies, like Syria and Yemen, adds another layer of complexity, with their economic activities being significantly hindered, thus affecting payment systems’ reliability and accessibility.

Finally, in countries with sanctions imposed, like Iran, international transactions face particular challenges related to international compliance and banking restrictions.

Understanding this varied economic landscape is crucial for businesses employing contractors in the MENA region, as it influences payment methods, transaction speeds, currency availability, and the overall ease of conducting cross-border financial operations.

Independent contractor payment options in the MENA region

Global digital payment platforms in the MENA region

Digital payment platforms bridge traditional banking and modern, convenient payment solutions, facilitating money transfers through online and electronic channels. Their adoption varies across the region, reflecting the blend of traditional values and rapid modernization.


PayPal is a global leading digital payment service provider, allowing users to send and receive money in multiple currencies across different countries.

  • One of the most widely used payment platforms globally, including in many MENA countries
  • Easy to set up and use for both senders and receivers
  • Offers strong protections against fraud
  • Can have relatively high transaction fees, especially for international payments
  • PayPal's currency conversion rates may not always be the most competitive


Focusing on facilitating global commerce, Payoneer is a financial services company that offers comprehensive, cross-border payment solutions for businesses and freelancers.

  • Offers multi-currency receiving accounts
  • Competitively low fees compared to traditional banking options
  • Provides additional services such as tax solutions and risk management
  • Account setup and verification process can be lengthy and complex
  • Fees associated with currency conversion, withdrawal, and account maintenance

Wise (formerly TransferWise)

Specializing in international money transfers with transparent fees, Wise is ideal for businesses and contractors working across borders.

  • Transparent pricing on currency exchange rates
  • Supports multi-currency accounts
  • Lower fees than traditional banks
  • Not a direct payment processing platform
  • Setup might be complex for some users


Skrill is a versatile digital wallet designed for personal and business use, offering instant online payments and money transfers. Known for its simplicity and wide range of supported currencies, Skrill caters to a global audience.

  • Simplifies sending and receiving money across borders with its digital wallet functionality
  • Competitive fees for currency conversion
  • Offers a prepaid card linked to the Skrill account for easy access to funds
  • Not accepted as a payment method in all MENA countries
  • Some transactions may entail relatively high fees for payers


WorldRemit specializes in international wire transfers, focusing on remittances and smaller transactions to mobile wallets and bank accounts.

  • Strong in mobile wallet offerings, particularly in countries where traditional banking is less prevalent
  • Offers instant or near-instant transfers to many destinations
  • Simple setup and sending process
  • May have lower maximum transfer amounts compared to other platforms
  • Fees and exchange rates vary significantly depending on the destination

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Local digital payment platforms

Digital payment platforms locally recognized in the MENA region offer specific advantages, such as more tailored services to the local markets, potentially lower fees for regional transactions, and customer service attuned to the local languages and business hours.

Fawry (Egypt)

Fawry is a leading Egyptian digital payment system providing a wide range of e-payment services, including bill payments, mobile top-ups, and online payments.

  • Strong presence in Egypt with a vast network of payment terminals
  • Offers a broad array of e-payment services for both consumers and businesses.
  • Services are accessible through various channels, including ATMs, mobile phones, retail shops, and online
  • Primarily focused on Egypt, with limited reach outside
  • Fees may vary significantly depending on the type and destination of the transaction

PayTabs (Saudi Arabia)

Founded in Saudi Arabia, PayTabs is an award-winning, B2B payment processing solution designed to cater to both small and large businesses, enabling them to make or accept online payments.

  • Supports transactions in several currencies, making it suitable for international businesses
  • Easily integrates with various e-commerce platforms and websites
  • Offers robust security and fraud prevention measures
  • Transaction fees may be higher than some international counterparts
  • While expanding, it primarily caters to businesses within the MENA region

Telr (UAE)

Telr is an online payment gateway offering smooth integration options for merchants looking to accept online payments across multiple countries in the MENA region.

  • Supports a vast range of currencies and languages, enhancing customer experience in diverse markets
  • Offers strong anti-fraud mechanisms and stable transaction processing
  • Provides payment solutions tailored to various types of businesses, from startups to large enterprises
  • Some businesses might find the fees less competitive for smaller transaction volumes

  • The setup process can be complex for those new to e-commerce

Bank transfers

In the MENA region, bank transfers are a widely accepted method for conducting financial transactions, including paying contractors or engaging in business-to-business transactions. Here's a look at some of the commonly available bank transfer frameworks in MENA, their characteristics, and their pros and cons.

SWIFT transfers

SWIFT (Society for Worldwide Interbank Financial Telecommunication) transfers are a standard for international bank transfers, allowing money to move across borders securely between banks.

  • SWIFT transfers are supported by most banks worldwide, including those in the MENA region
  • Highly secure, utilizing a system of codes to ensure money reaches the intended destination
  • Can be expensive because of bank fees and intermediate charges
  • May take several days for the transfer to be completed

IBAN Transfers

The International Bank Account Number (IBAN) is a system to help identify bank accounts across national borders. In the MENA region, IBAN facilitates the processing of international payments with a lower risk of transcription errors.

  • Reduces errors in bank transfer details
  • Streamlines the process of cross-border payments
  • Not all countries use IBAN, which can limit its effectiveness for certain international transfers

SAMA's SARIE system (Saudi Arabia)

The Saudi Arabian Riyal Interbank Express (SARIE) is a system developed by the Saudi Arabian Monetary Authority (SAMA) for real-time bank transfers within Saudi Arabia, including both high-value and low-value transactions.

  • Offers immediate or near-immediate transfer of funds
  • Available across all Saudi banks, ensuring widespread accessibility
  • Limited to domestic transfers within Saudi Arabia
  • Primarily designed for financial institutions and may not be as accessible for individual users for smaller transactions

UAE's UAEFTS system

The UAE Funds Transfer System (UAEFTS) is a real-time gross settlement system used by banks in the United Arab Emirates for domestic and cross-border transactions.

  • Supports a wide range of transactions, including salary transfers, bill payments, and international transfers
  • Ensures fast and secure settlement of transactions
  • While designed for bank-to-bank transactions, consumer access may depend on individual bank policies.

Central Bank of Egypt's ACH system

The Automated Clearing House (ACH) system by the Central Bank of Egypt facilitates electronic transfers for both high-volume/low-value payments like payroll and low-volume/high-value transactions.

  • Caters to various types of electronic payments, improving operational efficiency for businesses
  • Typically offers lower transaction fees compared to traditional wire transfers
  • Depending on the transaction type, settlements might not be real-time
  • Mainly designed for domestic transactions within Egypt

Bahrain's Electronic Fund Transfer System (EFTS)

The EFTS facilitates immediate and same-day bank transfers between accounts in Bahrain, including Fawri+ for immediate transfers, Fawri for same-day processing, and Fawateer for bill payments.

  • Offers options for immediate and same-day transfers
  • Supports a broad range of transaction types and amounts
  • Services are restricted to Bahrain
  • Effectiveness depends on the broad adoption by banks and billing companies in Bahrain

Jordan’s JoMoPay

Jordan Mobile Payment (JoMoPay) platform, operated by the Central Bank of Jordan, allows customers to make payments and transfer money domestically using mobile devices.

  • Enables accessible and inclusive banking services, especially for unbanked populations
  • Represents a step towards the digitization of financial services in Jordan
  • While growing, digital payment adoption among consumers and merchants is still evolving
  • Primarily focused on domestic transactions

Understanding Local Currency and Exchange Rate Implications

Paying foreign independent contractors in the MENA region often necessitates navigating several different currencies and being mindful of exchange rate fluctuations, which can affect the cost of contracts and payments. The region uses a wide array of currencies, from widely recognized ones like the UAE Dirham (AED) or Saudi Riyal (SAR) to less common ones such as the Egyptian Pound (EGP) or Moroccan Dirham (MAD).

Businesses must stay informed about current exchange rates to ensure contractors receive the correct amount and are not adversely affected by currency devaluation. This is particularly pertinent in countries experiencing high volatility or inflation, where the value of local currency may fluctuate significantly against the US dollar or Euro.

Using global payment platforms that manage currency conversion can help mitigate some risks associated with exchange rates. However, businesses should also factor in transaction fees, which can vary significantly depending on the platform and the currencies involved. Transparently discussing these aspects with contractors beforehand can preempt misunderstandings and foster trust.

Compliance with Local Labor Laws and Tax Regulations

Each country in the MENA region has its unique set of local laws and tax regulations that businesses must adhere to when employing and paying contractors. Non-compliance can lead to legal complications, financial penalties, and reputational damage.

Understanding whether a worker is classified as an employee or a contractor is a fundamental step, as this impacts the contractual relationship, minimum wage, payment structure, tax obligations, and social security contributions. For instance, contractors typically handle their income tax contributions and tax returns, contrasting with employees, for whom the employer is responsible for tax withholding and employee benefits such as health insurance.

Moreover, some countries in the MENA region have implemented VAT (Value Added Tax) systems, affecting how services are invoiced and taxed. Saudi Arabia and the UAE, for example, require businesses to consider VAT in their financial operations, including contractor payments.

Engaging a local legal consultant can provide invaluable insight into navigating these complexities, ensuring compliance, and structuring contractor agreements in line with local requirements.

What is misclassification?

Misclassification occurs when an employer classifies an employee as a contractor incorrectly. This distinction is crucial because it affects tax obligations, employee benefits eligibility, and labor law compliance.

Why is it important to avoid misclassification?

  • Legal and financial consequences: Misclassification can lead to penalties, back taxes, and legal repercussions
  • Compliance with labor laws: Correct classification ensures adherence to applicable labor laws, including minimum wage, overtime, and employee benefits
  • Reputation: Proper classification practices uphold a business's reputation and integrity in its professional relationships and with regulatory bodies
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Mitigating Risks When Sending International Payments

International payments to contractors in the MENA region entail navigating risks associated with currency fluctuation, regulatory changes, and potential fraud. Employing strategies such as locking in exchange rates, diversifying currency holdings, or using hedging instruments can help manage the impact of currency volatility.

Staying updated on regulatory changes is crucial to ensure that payment methods comply with both local and international labor and tax laws, as is implementing robust security measures and choosing reputable payment platforms, which are essential steps in protecting against fraud. Verifying contractor identities, using secure communication channels, and understanding common scam tactics can further mitigate risks.

Make sure you are prepared to grow the right way and discover the compliance challenges companies face when growing globally.

Download the guide

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Building Strong Relationships with Contractors

Fostering strong relationships with contractors goes beyond timely payments. Clear and consistent communication, respect for their work and time, and openness to feedback all contribute to building trust and loyalty. Recognizing and appreciating the quality of work can motivate contractors, encouraging a sense of partnership.

Regular check-ins can help identify any challenges early, allowing for adjustments as needed. Providing constructive feedback and being receptive to suggestions from contractors can foster an environment of continuous improvement and collaboration.

Ultimately, treating contractors with the same respect and professionalism as full-time employees strengthens individual relationships and enhances the business's reputation as a fair and desirable partner in the MENA region.

The importance of an independent contractor agreement

Having a well-drafted contractor agreement is one of the first steps you should take when beginning a business relationship with self-employed workers in the MENA region. Just like employment contracts, this document not only defines the details of the working relationship and the expectations from both parties but also provides a legal framework that can protect the interests of both the hiring company and the contractor. A comprehensive contractor agreement should include the following information:

  • Scope of work: Detailed breakdown of the services to be provided (deliverables, working hours)
  • Payment terms: Payment amounts, schedule, and method (e.g., direct deposit, upfront, milestone-based)
  • Duration: Start and end dates of the contract or project milestones
  • Confidentiality and intellectual property rules: Terms regarding the use of confidential information and ownership of work
  • Termination clause: Conditions under which the contractor agreement can be terminated

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Supercharge your contractor management with Deel

In the current landscape of business relations, the adherence to employment laws, the clarity of contractor agreements, and the effective management of contractor pay significantly affect the operational success of businesses in Europe. Whether dealing with direct deposit methods, navigating the complexities of payroll taxes, or understanding the functionalities of digital payment platforms, the goal remains the same: to foster seamless, compliant, and mutually beneficial relationships between businesses and their diverse workforce.

Discover how Turing expedited monthly payments from days to an hour for +500 contractors by using Deel.

When we came to understand the importance that Deel places on individual country laws and making sure that contracts are structured in the right way, Deel really stood out. And even though some of your competitors have payments, it wasn’t with the same ease at which we could do it with Deel.

Sudarshan Sivaraman,

Head of Customer Success & Sales, Turing

By integrating a solid understanding of tax forms, regulatory requirements, and the nuances of labor laws into their global payroll systems, business owners can avoid common pitfalls like a misclassified workforce, ensuring compliance and fostering a productive, efficient, and compliant working environment.

Deel offers solutions to all your contractor management needs. Cut the hassle of contractor onboarding and administration, the risk of misclassification, and the time-consuming complexity of using multiple platforms and systems. From easy contract creation to seamless payments, we can handle it all. 

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